Intercharm 2009 - Quality over quantity

Due to the global financial problems that have affected most C&T industries worldwide there was little doubt that the repercussions of the crisis would be evident at the Intercharm 2009 show, held at the Crocus exhibition centre, Moscow last October. However, the general consensus among exhibitors was that despite being less busy when it came to footfall, there were still opportunities to be had and contacts to be made.

?Anna Dycheva-Smirnova, business development director for Reed Exhibitions and ECM columnist, says: “The Russian market hasn’t been directly hit as a result of the crisis. But what we have started to see is that we’ve been caught up in the backlash of what has been happening. Imports have become more expensive and as a result consumers haven’t stopped spending on cosmetics, but usage has not grown.”

Exhibitor numbers showed that Russian C&T insiders were feeling the strain. There was a 10% drop on last year’s exhibitors to 760 stands, however there was once again a strong international feel to the show with 30% of overall exhibitors coming from countries such as China, France, Spain and Singapore. The 2009 exhibition also played host to a number of news forums throughout the show including one that saw an afternoon focus on what Unipro, the Italian trade association, called: The Italian cosmetics industry: prospects for co-operation.

“We maintain strong ties with international associations,” says Dycheva-Smirnova. “We have something coming up in 2010 with the French cosmetics association and have already had a high percentage of re-bookings from the international exhibitors for this show including more Italian, French and Spanish companies.”

A natural push

One foreign company exhibiting at the show was Natura House, a natural brand based in Italy. Daniella Spailtini, export manager and owner of the company, says: “We started distribution in Russia a while ago, we entered St Petersburg in 2005 and are also in Moscow. This isn’t our first time at the show and we return each year as it has proved successful, for example last year we found distributors for our products in Latvia. “Russia is a very big potential market and people are beginning to seek natural products such as ours. Regarding the show itself I feel the recession has been beneficial in that it has weeded out both the weak companies and the weak visitors. There are less in terms of quantity, but there are more quality companies here than last year – I think next year will be even better.”

It seems that as trends go, natural and organic is one of the biggest in Russia at present. “Russia is very in tune with western trends,” says Dycheva-Smirnova. “Natural and organic is definitely growing in popularity but the only downfall is that consumers lack education about this subject.”

Angelica Romanava, spokesperson for the Russian distributor Bionavtika, agrees. Attending Intercharm for the first time in a bid to gain exposure for its brands with retailers visiting the show, Romanava said that natural offerings are welcomed, but that there isn’t a huge concern with certification issues. “Despite some consumers wanting certification for natural products such as ours, it isn’t a well known trend at present. Eastern Europe follows the west slowly, so I’m sure the demand will come. The skin care brands we distribute – Florame, Ecodoo and Caltier – are French and all of them have Ecocert accreditation. There is not yet any competition in the eco arena as it’s just not big enough. However, we want to join forces with the small amount of companies in our field in order to generate awareness of these products and their benefits.” Questioned as to whether price was a factor which was deterring some Russian consumers from purchasing these products, Romanava was philosophical. She said: ?“It may deter some people at the moment but there are a lot of rich people in Moscow, and in some parts of the regions, so it may be a problem for some, but in two to three years people will put the health aspect over financial concerns.”

Smelling sweet

The soap industry also had a strong presence at Intercharm 2009, with many brands showcasing their wares. One company, De Laurier, is a Belgium distributor of scented soaps and bath products. “We are similar to Lush and these kind of products are well received by Russian consumers, but we feel we are more unique than Lush and have more exotic fragrances. We also differentiate ourselves with our products such as the Bath Oil for Lovers and the provocative fragrances we use. However, this is our ninth time at Intercharm and it’s clear that the credit crisis has stopped some key investors from attending,” said Elena Shknleva, marketing manager for De Laurier.

Many of the exhibitors, both domestic and international, were distributors hoping to use the show to build contacts within the growing eastern Europe C&T markets. Spa distributor Thal’ion was keen to showcase its wares after consciously deciding to step out of the show arena ten years ago. This year the distributor felt that Intercharm would be the perfect setting to step back into the limelight. A spokesperson for the company said: “We are using Intercharm this year to build up exposure of the brand again and to meet new spas and salons who may use and stock our products. All of our brands including Thal’ion, Sultane de Saba and Thalasso, have been on the Russian market for some years. Consumers react well to the natural connotations of the algae in the products. We want to showcase these products to our clients, and Intercharm and Intercharm Professional, held in the spring, are the best shows to do this.”

The perfumery channel was also well represented at Intercharm, with large distributors and manufacturers having bold stands at which to present their offerings. One indigenous fragrance house hoping to use the show to build contacts was Parfum External. A Russian producer of fragrances since 1995, Ksenya Timoslina, marketing manager for the company, commented: “We distribute and manufacture the products ourselves in order to keep costs down, although there are a lot of distributors here at Intercharm. Our fragrances are mass market scents which don’t rival the big brands made by the multinationals. We are targeted at a different audience and there is room for both of us in the Russia marketplace. This is our first time back at the show after a ten year break. Whether any of the contacts we have made materialise into something worthwhile, we will have to wait and see after the show. This will also influence our decision on whether we return next year”

One company keen to come back next year was the Russian distributor of three brands that are all new to the market, skin care brands Novosit and Propeller and hair care brand Zolotoy Shelk. All three brands have been on the market for three years or less and so the company chose to be situated in the Zoom arena, an area dedicated to showcasing brands that are in their infancy and therefore fairly new to market. However, as a bigger nod to the constant financial strains in the current market, Irina Titova, brand manager for the group, had other reasons for choosing this area. “Yes we have new brands to showcase but some of our brands have been on the market for a while. We actually chose to place ourselves here as it is cheaper to hire this booth, rather than in the main arena itself. In a recession every penny counts.”

The calm after the storm

Despite smaller numbers of both visitors and exhibitors, some companies felt this actually worked out for the better, allowing for a more selective and quality show. New concepts introduced at this year’s show proved successful, such as the Pavilion of Russian Manufacturers set to return in 2010. “The pavilion for Russian manufacturers will be expanded next year as it was so well received and we will strengthen the concept by running a conference programme for retailers from the regions alongside it, to give these companies extra help,” says Dycheva-Smirnova.

Another testament to the strong reputation and professional standing of the show is the launch of Intercharm Milano to be held from the 18-20 September this year in Milan. Organised by Reed Exhibitions Italia, Intercharm Milano is set to follow a similar format to the Russian show and will incorporate the hair, nail care, perfumery, cosmetics, spa and packaging sectors.

According to Dycheva-Smirnova more exhibitors will return to the Russian show next year as the economy attempts to stabilise and the event will return to form as concepts such as the Pavilion of Manufacturers and the news forums grow in size. The exhibitors at this year’s show, while aware of the threat the crisis holds, were decidedly upbeat and felt that it was not enough to make them worried, having faith in the steadfast loyalty of their consumers. And it is this resilient nature that will keep the Russian C&T industry, and the Intercharm show, going from strength to strength.